Limited Accountability: Financial Reporting at White Hat Charter Schools
October 16, 2006
Ohio charter schools operated by White Hat Management received $100 million in state funding last fiscal year. Although more information is becoming available on the use of these funds, the full picture remains opaque a year after the Ohio General Assembly required companies that operate charter schools to provide a detailed accounting including the nature and costs of the services they provide at each school. Specifically:
- White Hat has not reported how much it spends instructing its 14,729 students, compared to administration, building operations or other kinds of expenses. This information is easily available for other public schools.
- The company does not disclose how much it spends buying textbooks.
- A substantial share of White Hat’s expenses at the schools it operates – nearly half at its Life Skills schools – goes toward overhead or purchased services. Thus, we still don’t know clearly how this money is being spent, and it is impossible to get an exact reading of how much the company is making in profits.
This October 2006 report examines information provided by the White Hat schools as part of the Auditor of State’s annual audits for the 2004-2005 school year as well as five-year financial forecasts made last fall to the Ohio Department of Education. It finds that today’s rules, as currently enforced, do not require the full breakout of expenses that the public has a right to demand, and other public schools already provide. The report also makes recommendations on how to tighten the rules and create more accountability.